Top five rising stars of the investing world

When it comes to choosing a fund to invest in, investors want to know that the person in charge has the credentials to make their money grow.

Five stars: We take a look at the new generation looking to make a name for themselves

We all know of the existing star managers, such as Anthony Bolton and Neil Woodford, who remain hugely popular with investors, offering the combination of a well-known name and an excellent track record.

But what about the stars of tomorrow? Who are the young whippersnappers looking to step up to the plate and become the well-known investment managers of tomorrow? And which funds do they manage?

Spotting that future star is a tricky business.

After all, many investors dream of getting in a ground level with the next Neil Woodford, but for many managers that will never happen.

So where do you look? TQ Invest has exclusively revealed to This is Money, its top five rising stars of the investment world.

Old hands vs a rising star?

Not only can a rising star offer the potential of good future growth, bringing new ideas and a fresh approach, they can offer stock diversity to an existing portfolio, particularly if they have been given a new fund of their own.

A fund launched for a rising star in more recent years is likely to be relatively smaller and therefore more nimble.

The benefit of this is that the fund manager won't be limited to large cap stocks, they can take advantage of smaller investment opportunities which can give a more meaningful exposure to their fund. Investment opportunities bigger fund managers would not consider.

This also has the potential to diversify an investor's portfolio as there is less likelihood of stock duplication as can happen when you invest in several of the big name funds.

Tom Biggar, head of investments at TQ Invest, says: 'Many investors look to hold their money with a manager for 20 years plus, and those who invested with the likes of Neil Woodford in early 2000 (bearing in mind he became a fund manager with Invesco in 1988) will have received stellar results.

'With many of the current star managers being in their 50's and 60's, investors may want to start consider building the next generation of rising stars to complement their existing portfolio.'

Why rising stars are important to watch

Rising star fund managers are often homegrown from within the fund house, so they often come in as graduate recruits who rotate in the role of analyst through the different markets.

The brightest stars or talent are picked out and mentored further by the existing leading fund managers.

Rising stars usually come into the industry with new fresh ideas and are then nurtured and encouraged to move forward in their roles.

By the time investors notice rising stars, they are already well equipped for the fund manager role and likely to have their foot in the door by being a co-manager on an established fund alongside a well established manager.

Rising stars typically move on to be given a fund of their own or they may take the helm of the co-fund they currently help to run.

By looking to the next generation of rising stars investors need to look for young managers that are consistently performing and most importantly have the potential to deliver reliable, consistent returns over the long term.

There are potentially bigger risks when investing in a rising star as dependent on the fund house, the new manager may be allowed to run with their more innovative portfolio ideas and this is a very important consideration that you should bear in mind when making your decisions.

Top five rising stars and their funds

Here is TQ's verdict on five to watch - click on the linked fund name to check performance

A classic case of being brought up from within the ranks. In his nine years investment experience, six years were spent as an equity analyst before becoming the fund manager of the Fidelity UK Opportunities fund.

An economics graduate from Warwick University, over the last three years he has developed his expertise as a small cap stockpicker and takes a contrarian approach focusing on unloved and undervalued stocks where the market has been potentially overlooked for change and growth.

He primarily invests in the bottom 10% of UK equities by market cap. Behind him is a research team which he uses to cross check information. This gives him an invaluable edge.

He is already rated with three Crowns by Financial Express - certainly a promising start to his fund management career.

Jenna graduated with 1st Class Honours from Oxford University in 2001 and worked as an equity analyst at Orbitex Investments before switching to the bond market.

She joined Henderson as a credit analyst in 2002 and began working exclusively with her then mentor John Pattullo in 2003.

She became co-manager (with John) on the flagship Henderson Strategic Bond fund and Henderson Preference & Bond funds in January 2006 and co-manager of the Henderson Managed Distribution fund in April 2009. She now manages money to the tune of £2bn.

She tries to think differently from the majority of fixed income investors by investing in a broader range of asset classes which has been instrumental in the success of the Strategic Bond fund in particular.

A keen (but self-confessed amateur) fell walker, Jenna has all the abilities to navigate the ups and downs of interest rate and inflation cycles that affect the bond market so much and has already become a star in the fund management world.

Ben started his investment career as a credit analyst with Gordian Knot before joining M&G in 2007 as a junior portfolio manager.
He was appointed fund manager of the M&G High Interest fund in February 2009 and since launch in September 2010, he has also been the co-fund manager of the M&G Inflation Linked Corporate Bond fund and the M&G European Inflation Linked Corporate Bond fund.

The MA Philosophy graduate from Edinburgh University has been mentored by arguably two of the best fixed interest heavyweights in the industry, Richard Woolnough and Jim Leaviss and one of the best fixed interest teams around.

In the current economic environment with inflation pressures all around, an inflation protection solution may be the answer and Ben Lord could be the man for the job. Already entrusted to run money in excess of £340m, Ben is one to consider for the long term.

Another candidate from within the ranks, Stuart joined M&G as an equity analyst in 2004 working on the global team.

In July 2008, he was appointed manager of the M&G Global Dividend fund when it was launched. The Bath University graduate of 2003 now manages the number one ranked (since launch) global equity income fund that has already grown to a size of £925m.

Unlike traditional funds, the fund focuses on dividend growth rather than dividend yield and Stuart has the flexibility to seek the best investment opportunities globally without being constrained by geographic boundaries.

If Stuart can emulate the success of his more experienced star colleagues, Graham French and Tom Dobell, he is certainly worth considering investing in for the long term.

Rob graduated from Oxford University in 2000 and after a couple of years with Goldman Sachs moved to Neptune in 2002 taking up an investment analyst role.

His first fund to manage was in 2004 when he became the manager of the flagship Neptune European Opportunities fund. Since then he's also been given the mandate to run the Neptune European Max Alpha fund and the Neptune European Income fund.

Assets under management exceed £1.2bn. As an up and coming name in a rather unloved sector he has already built up a strong track record and earned three Crowns from Financial Express and is AA rated by OBSR. He has managed to beat the sector average every year since 2007.

Rob likes the top down view and stock picks from preferred sectors. His contrarian view has proved effective and recently he repositioned the portfolio as he felt areas exposed to emerging growth will underperform. This rising star is one to watch.